It’s time to begin thinking about year-end! Can you believe it? What do you see as your greatest accomplishment this past year? With the year-end approaching, we often get asked several questions on how to get ready. We thought this year we would provide a short Q&A list to help prepare for Year-End.
Why do I need to think about the year-end NOW?
Any tax strategy or estimated payments for your business should be planned out well before you approach the end of the year. We often recommend to our clients to meet with their CPA or tax professional this time of year.
What kinds of items should you discuss?
- Any tax law changes going into effect this year or next year
- Your fixed asset purchases
- An effective strategy for reducing your tax liability
Depending on the outcome of the meeting, your CPA or tax professional should give you some practical steps to take in the remaining months of the year.
What other things can I do to prepare for the year-end?
Besides meeting with your CPA or tax professional, there are a few practical things you can do:
- 1099 Vendors – Verify that all W-9 information on file is current including addresses and Tax Identification Numbers (TIN). Make sure all payments are recorded in your accounting system, including payments made with cash.
- Payroll – Verify all employee information is current including address and Social Security Numbers. Confirm that gross wages from your federal and state payroll reports agree with your financial records and that all payroll tax returns for previous quarters have been filed on time.
- Expenses – Consider paying your vendors and contractors on or before December 31. Copy or scan receipts for all expenses for the year (preferably digitally) so that you will have the receipts available if you are audited.
How can I get ready for next year?
Good for you for thinking ahead! A good place to start is by reviewing your business plan. Compare the goals you set at the beginning of this year to what actually took place. Do you need to adjust your goals? If you are using budgets in your accounting system, you should also begin drafting up these up for next year.
I know the year-end is coming but my books are seriously behind! What do I do?
First, don’t panic! Remember that if you are behind, most federal and state tax agencies have provisions for you to file an extension on your taxes. In the meantime, take some time to identify which areas of the books need to be addressed first. Do you have customer invoices to send before the year-end? Take care of those first. Any outstanding bills owed? Handle those next, and so on.
Another strategy is to enlist the help of a bookkeeping firm to catch up on your books before the end of the year. Find out more about our Catch-up service for both QuickBooks Online and Xero users.